Hunch: Obama doesn’t want a deal to avoid the fiscal cliff

posted at 8:31 am on November 17, 2012 by Jazz Shaw

Everyone came away from the initial summit meeting between Obama, Boehner and Reid with big smiles and a public air of confidence that Friday’s kumbaya moment would lead to The Big Deal. Call me a cynic, but I’m still not buying it. Yesterday, AP touched on a part of this story, tossing out some ideas about how everyone – particularly Democrats – might walk away with relatively clean hands if no deal is reached on the fiscal cliff this year. It’s all true, but for some of us there’s a bit more to the story. The Democrats, for their part, seem to have plenty to gain and not much to lose.

Some Democrats are pushing an unorthodox idea for coping with the “fiscal cliff”: Let the government go over, temporarily at least, to give their party more bargaining leverage for changes later on.

The idea has plenty of skeptics, and the White House regards it frostily. But it illustrates the wide range of early negotiating positions being staked out by Republicans and Democrats as lawmakers gathered Tuesday for their first post-election talks on how to avoid the looming package of steep tax hikes and program cuts.

But why would this work for Barack Obama? Because – as we learned the hard way on election day – he can watch the polls with the best of them. And if this train goes off the rails he has reason to believe that he won’t be left holding the bag.

A new poll by Hart Research’s Geoff Garin, conducted for Americans for Tax Fairness — a group that wants the Bush-era tax cuts to end for those who earn more than $250,000 — found that a majority of voters cited changing the tax system as a key factor in their votes, and that the majority broke for President Barack Obama.

The survey also found that Democrats have changed the landscape on an issue that has eluded them for years — taxes. The survey found that most want the Bush-era cuts on top earners to expire, but that Republicans will shoulder blame if all of the Bush cuts, including those on the middle class, expire because a deal can’t be reached.

Basically, this works out to a win-win for Obama. Yes, he could look like the great peacemaker and try to strike some sort of grand bargain with Boehner. And if he did, he would likely get some of what he and the Democratic majority want in exchange for taking a slightly less than maximum raise on taxes for the most wealthy. But why?

If he takes a very hard line and forces the showdown to a collapse in discussions, several potentially positive (for him) results are baked into the cake. He can claim that Republicans refused a “balanced approach” and it’s their fault that everyone’s taxes went up. He then has the Democrats force a vote on a bill to only lower taxes on the middle class and the poor and just dares the GOP to vote against it. (They won’t.) At this point he has the tax / revenue increase he promised without giving up a single thing. Now the negotiations start anew to talk about “spending cuts” but the GOP’s major bargaining chip is gone. Obama gets to put up a far more shallow version of cuts, and if the Republicans don’t like it, they can choose to reject the deal and just let the deficit continue to skyrocket.

The Republican Party took the rap for the debt ceiling and is under suspicion for the fiscal cliff. A new Washington Post-Pew Research poll has 53 percent of Americans ready to blame Republicans if America actually goes over the edge and only 29 percent planning to point fingers at President Barack Obama.

Understanding this, thoughtful Republicans are feeling freer to risk the tea partiers’ wrath and cooperate with Democrats. The teams may disagree on much, but at least they’re now playing in the same ballpark.

How does that work? Fairly simple. Just as I’ve been saying since earlier this year, if you needed congressional action to raise taxes it would never happen. But in this case, to raise tax rates all you need is for Congress to do nothing. And when you need nothing done, there’s no better crack team than Congress. And once the taxes are up, even the GOP reps who have signed the Norquist pledge are free to sign a bill that lowers taxes… even if that doesn’t apply to the wealthy. They get to remain covered on their voting record in their home districts and blame the fallout on the Democrats.

Here’s the part where I reveal my secret strategy of how the GOP can thwart this plan and come out on top.